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Globalization Challenges in Project Management-challenges in project management

Globalization Challenges in Project Management
Abdulrazak Abyad
Director, American University of Technology
CEO, Abyad Medical Center
Chairman, Middle-East Academy for Medicine of Aging
President, Middle East Association on Age & Alzheimer's
Coordinator, Middle-East Primary Care Research Network
Coordinator, Middle-East Network on Aging
Dr Abdulrazak Abyad
Email: aabyad@cyberia.net.lb
Introduction ties and challenges (Yong & Javalgi, 2007). However, a review
of the results of project monitoring and evaluation on World
Bank projects indicates that many of the key problems of im-
Globalization is the tendency of firms to extend their sales or plementation lie in the general environment of the project,
manufacturing to new markets abroad. For businesses eve- and are not under the direct control of the project manager.
rywhere, the rate of globalization in the past few years has The project management (PM) environment for international
been nothing short of phenomenal. Globalization of markets development projects is also much more complicated than
and manufacturing is important, in part because it has vastly domestic projects in industrialized countries (Kwak & Ibbs,
increased international competition. Throughout the world, 2002). Project managers should understand the social, eco-
firms that formerly competed only with local firms - from air- nomic, political and cultural factors that affect the project
lines to car makers to banks - have discovered they must now environment.
face an onslaught of new foreign competitors. Porous inter-
national boundaries and trans-border flows of capital have
precipitated a relentless proliferation of multicultural projects International projects are more complicated and risky than
(Ghoshal, 1987). domestic projects. Some risks encountered in international
projects are not the same as those in domestic projects. The
cultural differences issue has been recognized as one of the
Globalization has impacted project management profound- main concerns in international projects management (Parhiz-
ly, and has only reinforced the trend toward adoption of the gar, 2002). Although there may also be cultural differences in a
project mode of work organization. Globalization in project domestic project team because of the team members' differ-
management means among other matters more projects ex- ence in origin, international project teams seem to be more
ecuted in the multi-cultural environment. East-West culture easily influenced by cultural differences (Thomas, 2002). Kwak
mix is an example of such a situation,requiring from the stake- (2002) states that the culture issue is the least known but the
holders quite a different approach. The spectacular globaliza- most hazardous in the context of international development
tion of firms in the course of the past decade has been a key projects.
challenge for practitioners and researchers alike (Bhide, 2000).
Strategy researchers have attempted to pin down the various
alternatives for firms to gain competitive advantages in inter- Some Issues in Managing International Projects
national markets (Ghoshal, 1987). They have also considered Many researchers and practitioners (Murphy, 2005; Youker,
the challenge of managing across borders and implementing 1992; Howes & Tah, 2003) are aware of the challenge of man-
a global strategic management process. Forming multicultur- aging international projects, since international projects face
al teams has been one of the organizational responses taken uncertainties caused by host country conditions (Ozorhon,
by multinational corporations (MNCs) (Bartlett and Ghoshal, Arditi, Dikmen et al, 2007). Researchers have previously iden-
1989, 1992). tified some key factors that constrain the success of interna-
tional projects.
Effect of Globalization on Project Management
With the advent of globalization, project management is no Cultural issues
longer a local issue, but an international affair that is risky in Large-scale international projects are of a global nature.
nature (White & Fortune, 2002). Changes in the global envi- Therefore, a high degree of coordination and communication
ronment are presenting organizations with both opportuni- is needed. Communication in the international environment
is complicated by different languages, cultures and etiquette Project management in an Asian context
(Loosemore and Muslmani, 1999). The internationalization
in project management creates intercultural communication The big cultural differences between East and West lead also
problems that result in significant misunderstanding and con- to different approaches in project management, both at high
flict. Pheng and Leong (2000) conducted research on inter- level of thinking and general attitudes, as well as at the level of
national construction in China, and determined that cultural specific techniques and tools. Contemporary project manage-
differences are a critical factor that can actually affect the out- ment, challenged by globalization, is looking for new, more ef-
come of an international project. For an international project fective methods of managing projects and managing project-
manager, understanding key concepts in cross-cultural man- based organizations.
agement and project management is the basic requirement
in the era of globalization. Muriithi and Crawford (2003) also Since project management, as a discipline, originated in a
argue that Western management concepts may not be appli- Western culture, incompatibilities between project manage-
cable to other cultures that are not so deeply rooted in the ment values / beliefs and those of traditional Asian cultures
Western philosophy. They suggest that appropriate modifica- are to be expected. A recent paper explores these differences
tions can be made to current management theories by study- in the context of Chinese organizations (Wang & Liu, 2007).
ing cultural differences. Specifically, the authors look at four contrasting value/belief
pairs, which cover the major differences between the two cul-
Political factors. tures:
Khattab, Anchor and Davies (2007) did a study to examine the
vulnerability of international projects to political risks. Their ? Integration management vs. doctrine of the mean: This re-
study results showed that political risks are ranked first by re- fers to the contrast between project management practices
spondents. Other authors also mention that political interven- - which generally emphasize integrating opinions, resolving
tions can sometimes decide the success of foreign-invested conflicts and confronting risks - as opposed to traditional Chi-
firms (Buckley, Clegg & Hui, 2006). Political risks are the key nese (and dare I say, Asian) practices in which confrontations
risks to successful international construction contracting. For and risks are avoided as far as possible.
international projects, these factors can produce problems ? Horizontal management vs. strong hierarchy: This refers to
that may not be problematic in domestic projects. Dikmen, the incompatibility between project management, which
Birgonul and Han (2007) state that political risk factors receive works best in a flat (or project-oriented) hierarchy, and the
the most attention from researchers in international projects. strong vertical hierarchies prevalent in Chinese organizations.
The latter organizational structure tends to emphasize supe-
Legal factors. rior-subordinate relationships in which "questioning the boss"
One of the more difficult aspects of doing business globally is is not encouraged.
dealing with vast differences in legal and regulatory environ- ? Team consciousness vs. family consciousness project teams
ments. The United States, for example, has an established set are generally temporary, and tend to emphasize collaborative
of laws and regulations that provide direction to businesses work across functions and merit-oriented performance evalu-
operating within its borders. But because there is no global ations. On the other hand, Chinese culture values long-term
legal system, key areas of business law, for example, contract family and kinship relationships.These are not always compat-
provisions and copyright protection, can be treated in differ- ible with cross-functional (or even intra-functional!) collabora-
ent ways in different countries. Companies doing internation- tion or performance-based recognition.
al business often face many inconsistent laws and regulations ? Task orientation vs. boss orientation in project management
(Buckley, Clegg & Hui, 2006). getting the job done is paramount, whereas in Chinese cul-
ture the emphasis is on keeping the boss happy.
Economic factors.
If you plan to do business in a foreign country, you need to The authors developed a questionnaire to explore the rela-
know its level of economic development. You also should be tive importance of each of the above value/belief pairs. Based
aware of factors influencing the value of its currency and the on the questionnaire, they conducted a survey involving re-
impact that changes in that value will have on your profits. If spondents from a wide variety of industries in Yunnan prov-
you don't understand a nation's level of economic develop- ince.The analysis of the results revealed that the major cultural
ment, you'll have trouble answering some basic questions, barriers to project management in Chinese organizations are
such as; will consumers in this country be able to afford the the last three items: i.e. Strong hierarchy, family consciousness
product I want to sell? How many units can I expect to sell? and boss orientation. It is interesting that a majority of the re-
Will it be possible to make a reasonable profit? Researchers spondents thought that the doctrine of the mean was consist-
pay a great deal of attention to economic risk factors in inter- ent with the integrative nature of project management. They
national projects (Dikmen, Birgonul & Han, 2007). . also find that the barriers tend to be larger in state owned
organizations than in private or joint ventures. Further, within
state-owned organizations, older ones tended to have larger
barriers than younger ones (Wang & Liu, 2007).
The paper noted that project management training has a criti- High- and Low-Context Cultures.
cal effect on lowering cultural barriers: As more individuals in Likewise, don't expect business people from these regions,
an organization received relevant training, the organization or business people from most of Mediterranean Europe, for
became more supportive of project management practices. that matter, to "get down to business" as soon as a meeting
The authors end with the caveat that their conclusions are has started.They'll probably ask about your health and that of
based on the result of a single (yet representative) survey, and
must therefore be treated as a pilot study (Wang & Liu, 2007). your family, inquire whether you're enjoying your visit to their
country, suggest local foods, and generally appear to be avoid-
ing serious discussion at all costs. For Americans, such topics
The paper articulates and explores some of the contrasts I have are conducive to nothing but idle chitchat, but in certain cul-
noticed in my own work with organizations in different coun- tures, getting started this way is a matter of simple politeness
tries; in my opinion, many of the observations made regarding and hospitality.
cultural barriers to PM practices apply to (non-Chinese) Asian
cultures as well (Wang & Liu, 2007). If you ever find yourself in such a situation, the best advice is to
go with the flow and be receptive to cultural nuances. In high-
Multinational Strategic Planning and Cultural context cultures in which personal and family connections
Environment have an effect on most interactions, include those in business.
Domestic businesses can make do with a single, overarch- The numerous interlocking (and often unstated) personal and
ing strategic plan to guide their efforts. International busi- family connections that hold people together have an effect
nesses have to make a choice between developing a single, on almost all interactions. Because people's personal lives
comprehensive strategic plan, different strategic plans for overlap with their business lives (and vice versa), it's important
different markets or a combination of both. Cultural consid- to get to know your potential business partners as human be-
erations can render a strategic plan that is highly effective ings and individuals.
in one country, virtually useless in another (Hall, 1969, 1976).
Even when two people from the same country communi- By contrast, in slow-context cultures in which personal and
cate, there's always a possibility of misunderstanding. When work relationships are compartmentalized, such as those of
people from different countries get together, that possibility the United States, Germany, Switzerland, and the Scandinavian
increases substantially. Differences in communication styles countries, personal and work relationships are more compart-
reflect differences in culture system of shared beliefs, val- mentalized; you don't necessarily need to know much about
ues, customs, and behaviors that govern the interactions of the personal context of a person's life to deal with him or her
members of a society. Cultural differences create challenges in the business arena (Hoftstede, 1991).
to successful international business dealings (Cohen, 1997).
Intercultural Communication.
Different cultures have different communication styles. For
In many countries, only members of the educated classes example, degrees of animation in expression can vary from
speak English.The larger population, which is usually the mar- culture to culture. Southern Europeans and Middle Easterners
ket you want to tap, speaks the local tongue. Advertising mes- are quite animated, favoring expressive body language along
sages and sales appeals must take this fact into account. More with hand gestures and raised voices. In addition, the distance
than one English translation of an advertising slogan has re- at which one feels comfortable when talking with someone
sulted in a humorous (and perhaps serious) blunder. Further- varies by culture. People from the Middle East like to converse
more, relying on translators and interpreters puts you as an from a distance of a foot or less, while Americans prefer more
international business person at a disadvantage. You're privy personal space.
only to interpretations of the messages that you're getting,
and this handicap can result in a real competitive problem.
Finally, while people in some cultures prefer to deliver direct,
Time and Sociability. clear messages, others use language that's subtler or more
Americans take for granted many of the cultural aspects of indirect. North Americans and most Northern Europeans fall
our business practices. Most of their meetings, for instance, into the former category and many Asians into the latter. But
focus on business issues, and Americans tend to start and end even within these categories, there are differences. Though
theirr meetings on schedule. These habits stem from a broad- typically polite, Chinese and Koreans are extremely direct in
er cultural preference: no-one likes to waste time. (It was an expression, while Japanese are indirect. This example brings
American, Benjamin Franklin, who coined the phrase "Time is up two important points. First, avoid lumping loosely relat-
Money.") This preference, however, is by no means universal. ed cultures together. We sometimes talk, for example, about
The expectation that meetings will start on time and adhere "Asian culture," but such broad categories as "Asian" are usu-
to precise agendas is common in parts of Europe (especially ally oversimplifications. Japanese culture is different from Ko-
the Germanic countries), as well as in the United States, but rean, which is different from Chinese. Second, never assume
elsewhere--say, in Latin America and the Middle East--peo- that two people from the same culture will always act in a sim-
ple are often late to meetings. ilar manner. Not all Latin Americans are casual about meeting
times, not all Italians use animated body language, and not all
Germans are formal.

What are the challenges of a project manager? The top 5 challenges for Project Managers Corporate problems. The first problem that a project manager will likely face is internal. ... Problems with your team members. Let’s face it, a project’s success is dependent on the people that execute it. ... Ensuring that the risks are low. As a project manager, it is expected that the risks in the project are low. ... Communication issues. ... Managing expectations. ...